Vintage Cards & Creations Ltd Auditor Reports

VINTAGE CARDS AND CREATIONS LIMITED ANNUAL REPORT 2010-2011 AUDITORS REPORT TO THE MEMBERS OF VINTAGE CARDS AND CREATIONS LIMITED 1. We have audited the attached Balance Sheet of VINTAGE CARDS & CREATIONS LIMITED as at March 31, 2011, the Profit and Loss Account and the Cash Flow Statement. of the Company for the year, ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conduct our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain responsible assurance about whether the financial are free of material misstatement. An audit includes examining, on attest basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation .We believe that our audit provides a reasonable basis for our opinion. 3. AS required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the Said Order. 4. Further to our comments in the Annexure referred to above, we report that: a) We have obtained all the information and explanation which to the best of our knowledge and belief were necessary for the purpose of our audit except for the Items mentioned In d(1) to (r) below b) In our opinion, proper books of accounts are required bylaw, have been kept by the Company so far as it appears from the examination of such books. c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in, agreement with the books of account. d) We further report that: (i) All balance of debtors, creditors, advance given , current liabilities and fixed deposits pledged with the sales tax authorities are subject to confirmation, reconciliation and consequential adjustments; If any, (ii) In absence of proper records, we are unable to comment on the valuation of the inventories. We have placed the reliance on the management representation in this regard. (iii) The Company had received Re. 91.00 sacs from various parties and had shown it as equity share application money in the Last year Balance Sheet. In absence of any Board Resolution or any documentation; we are unable to comment on the nature of these amounts received and the treatment of the same In computation of EPS:The Management has converted the same to Unsecured Loans in the Current year, but the management does not have any documentation for the Same being approved by relevant parties. (iv) Refer schedule S - Note No. 14 of Notes to Accounts: The Company is yet to issue Convertible warrants till the end of this report. (v) On the date of Signing of the Balance Sheet the Company has either sold off or written off Most of the Fixed Assets. Also the Agreement with Hallmark Inc. USA for use of the HALLMARK R Trademark and Logo Is canceled. Thus the Going Concern status of the Company seems to be affected unless the Management takes some fresh equity and steps to review the Company are initiated. e) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow statement dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. f) In our opinion and to the best of our information and according to the explanations given to us, and subject to (d) above, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in the conformity with the accounting principles generally accepted in India: (i) In the case of the Balance Sheet, of the state of affairs of the Company as at March, 31, 2011. (ii) In the case of the Profit and Loss Account, of the Loss of the Company for the year ended on that date; and (iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 5. On the basis of the written representations received from the Directors as on March 31, 2011 and taken on record that none of the Director is disqualified as on March 31, 2011, from being appointed as a Director in terms of clause (g) of Sub-Section(1) of section 274 of the Companies Act, 1956. For Uttam Abuwala Co Chartered Accountants Firm Registration No. 111164W C.A. Sumit bansal Membership No.: 135053 Place: Pune Date : December 6, 2011 Annexure to the Auditors Report: AS required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we further report that: 1. Fixed Assets: a) The Company has not maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets. b) As per information and explanations given to us and in our opinion, the fixed assets have not been physically verified by the management at reasonable intervals. Due to this, we are unable to comment on whether any material discrepancies were noticed and if so whether the same have been properly dealt with in the books of account. c) In our opinion and as per the information and explanations given to us, there was no significant disposal of foxed assets during the year but on the Date of Signing of the Audit report major fixed assets have been disposed off so the going concern assumption seems affected. 2. Inventory: a) The Company has not conducted physical verification of inventory during the year. Due to this we are unable to comment on whether the procedures of physical verification of stock are reasonable and adequate in relation to size of the Company and the nature of its business. b) The Company has not maintained proper records of Inventory. in absence of proper records, we are unable to comment about the discrepancies, if any between the physical stock and the book stock, if any. 3. Loans & Advances: a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in register maintained under section 301, of the Companies Act, 1956. b) The question of commenting on rates of interest and other terns and conditions on the loans granted being prejudicial to the interest of the Company, receipt of regular principal and interest and reasonable steps taken for recovery of principal and interest does not arise. c) The Company has taken loans from its wholly owned subsidiary company. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 0.86 lacs and the year end balance is Rs0.86 lacs. d) As informed to us, the loans taken from the wholly owned subsidiary company were interest free loans. e) In respect of loan taken from subsidiary company, we are unable to comment on the regularity in payment of principal amount as the terms of repayment have not been stipulated. 4. In our opinion, Internal control system of-the company needs to be strengthened in order to be commensurate to the size of the Company and nature of its business, for the purchases of the inventory, fixed assets and for the sale of goods and services. Further on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have not observed and continuing failure to correct major weaknesses in the internal control systems, except in the areas of inventory and fixed assets. 5. a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301, of the Companies Act,1956 have been entered in the register required to be maintained under that section. b) In our opinion and according to the information and explanations given the contracts or arrangements entered Into the register maintained under section 301 of the Companies Act, 1956 are reasonable having regards to the prevailing market prices at the relevant time and there are no transactions exceeding the value of Rs 5,00,000% in respect of any party during the year. 6. According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A, section 58AA, or any other relevant provisions of the companies Act 1956, and the Rules framed there under. 7. In our opinion, the Company needs to strengthen the internal audit system considering the size of the Company and the nature of the business. 8. AS informed to us, the Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, for any of the products of the Company. 9. Statutory Dues: a) According to the information and explanations given to us; and as per the records of the Company in our opinion the Company is not regular in depositing undisputed statutory dues including dues permitting to Investor Education and Protection Fund, Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Value added Tax, Service Tax, Custom Tax, Cess, and any other material statutory dues as applicable with the appropriate authorities. We have been informed that the undisputed dues in respect of Income Tax, Sales Tax, Employees State Insurance and Provident Fund were in arrears, as on March 31, 2011 for period of more than six months from the date they became payable. The details are as follows: Name of Statute Nature of dues Period to which Amount Rs. amount Income Tax Act TDS on Salary 2009-10 266862 2010-11 383724 TDS on Rent 2006-07 324088 2007-08 62724 2009-10 237028 TDS on contracts 2007-08 177125 2009-10 17977 2010-11 2389 TDS on Professional 2007-08 239613 Fees 2009-10 45125 2010-11 7302 TDS on Commission 2007-08 40086 2009-10 8966 2010-11 1075 Sales Tax Act Sales tax dues Up to September 4784588 2010 Profession Tax Act Profession Tax 2007-08 135000 2008-09 91190 2009-10 44140 2010-11 13050 Employees Provident Fund dues 1.4.09 to 30.9.10 324178 Provident Fund and Miscellaneous Provisions Act Employees State ESIC dues Up to September 47816 Insurance Act, 2010 b) As according to the information and explanations given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Value added Tax, Service Tax, Custom duty or Cess outstanding on account of any dispute other than the following. Name of Statute Amount in Rs. Forum where dispute is pending Maharashtra Sales Tax Act 2734595/- Assistant Commissioner of Commercial Taxes (Puns, Maharashtra) Maharashtra Sales Tax Act 2071218/- Maharashtra Sales Tax Tribunal Income Tax Act, 1961 1553557/- Commissioner Appeals 10. According to the information and explanations given to us, the Company has accumulated Losses as at the end of the financial year which exceeds One Hundred percent of its net worth and it has incurred cash losses in the current financial year and the immediate preceding financial year. 11. According to the information and explanations given to us and based on the documents and records produced before us, there has been no default in the repayment of loans to banks. There are no dues to financial institutions or debenture holders. 12. According to the information and explanations given to us and based on the documents and records produced before us the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities. 13. In our opinion and according to the information and explanations given to us, the nature of the activities of the business does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies. 14. In our opinion and according to the information- and explanations given to us, the Company does not deal or trade In shares, securities, debentures and other investments. 15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by other from banks or financial institutions. 16. The Company has not taken any new term loan during the year. 17. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, The Cash Flow Statement and other records examined by us, the Company has not used funds raised on short term basis for long term investment. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year. 19. According to the information and explanations given to us, during the year covered by our audit report, the Company has not issued any secured debentures. 20. The Company has not raised any money through a public issue during the year. 21. During the course of our examination of the books and records of the Company, carded out in accordance with the generally accepted auditing practices in India, and according to the information and explanation given to us, we have neither come across any instances of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by management. For Uttam Abuwala & Co., Chartered Accountants. (Firm Regn No: 111184W) CA. Sumit Bansal Membership No: 135053 DATE : December 6, 2011 Place: Pune